In the opinionated blog post, “What Is The Relationship Between Corporate Culture And Strategy” Torben Rick[1], the author, discusses how corporate culture and strategy correlate—specifically what is most important for a company. Rick concludes that strategy sets the path for a company to follow; however, culture is what pushes the company forward along this path.
I agree with the philosophy that corporate culture is more influential than corporate strategy. This is proven in firms such as Zappos, Twitter and Southwest Airlines. Zappos prides itself on employee satisfaction because they believe there is a proportional relationship between the employee and the customer. In essence, an employee who is well treated is more likely to treat customers with respect, which ultimately leads to an increase in total revenue. Zappos provides incentives (free food, 100% medical and dental coverage) for employees because they believe the money that is put into employee satisfaction yields larger profit margins.
Conversely, companies in which strategy overpowers corporate culture often retain fewer customers and become less profitable in the long run. For example, Michael Dell, the founder of Dell Computers, was innovative with his direct business model approach, which reduced inventory turnover and cut out the middleman process. Dell’s strategy had merit however the company’s corporate culture took a backseat. Dell is now known for their notorious time-consuming customer service call center. This has lead to an abbreviation of the Dell logo into a Hell logo in terms of customer service as shown in the figure below.
In summary, as Torben Rick stated,“Culture trumps strategy every time – culture eats strategy for breakfast”. In order for a company to maximize profitability, corporate culture must drive a company along the path strategy sets. As established companies that have superior corporate culture (Zappo) are excelling in todays economy, companies driven by corporate strategy have shown tendencies to struggle (Dell).
[1] Torben Rick is an experienced senior executive, both at a strategic and operational level at Meliorate Consulting Firm. Rick also has International experience from management positions in Denmark, Germany and Switzerland.
Critical Thinking Application: Does corporate culture and strategy exist in professional sports?
- Yes.
The Original Six, are the first six NHL teams. Each has a prevailing hockey culture. In addition, these six teams have more Stanley Cups combined than the rest of other 24 NHL teams.
- For example, in the National Hockey League (NHL) cities such as Boston, Toronto, Detroit and New York have a hockey culture that has lasted and acted as the face of the franchise for decades. Conversely, cities such as Phoenix, Nashville, and Florida focus more on strategies in order to win games. Therefore, it is of no surprise that the cities with greatest corporate culture attract the most talented players and are the must successful.
Sources Used:
Rick, Torben. “What Is the Relationship between Corporate Culutre and Strategy.” Meliorate. N.p., 7 June 2013. Web. 8 Nov. 2014. Click Here: For Link
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